TII classifies Rs 2,404.70 crore CCPS as NCI equity in accounts

Tube Investments of India Limited (TII) classified Rs 2,404.70 crore of TI Clean Mobility Private Limited (TICMPL) compulsorily convertible preference shares (CCPS) as non-controlling interests on 30 March 2026 after an amended shareholder agreement led management to assess that the instruments convert into a fixed number of shares.

Why did TII classify TICMPL CCPS as equity?

TII classified the TICMPL CCPS as equity because TICMPL management assessed that all CCPS were convertible into a fixed number of shares as at 31 March 2026. TII, TICMPL and the investors had entered into an amended and restated shareholders agreement during the quarter and year ended 31 March 2026.

TII consequently derecognised the fair-value liability of the CCPS at 30 March 2026, the amendment date of the restated shareholders agreement, and presented Rs 2,404.70 crore as non-controlling interests, or NCI, in the consolidated accounts. NCI represents the interest in a consolidated subsidiary held by parties other than TII.

The calculation of the investors' NCI share uses TICMPL's current and estimated valuations under the restated shareholders agreement, along with the maximum possible number of equity shares that TICMPL may issue on conversion. The filing does not provide the individual investor ownership percentages or the underlying valuations used in that calculation.

During the quarter ended 30 September 2026, TII and TICMPL further amended the agreement to reflect TII's additional Rs 250 crore investment in TICMPL Series C CCPS. TII said the agreement reflected the parties' understanding that all CCPS series will convert into a fixed number of shares at the end of their term unless conversion events take place.

How large was TII's CCPS reclassification?

TII's reclassification was Rs 2,404.70 crore, equal to the CCPS fair-value liability derecognised at 30 March 2026 and subsequently shown within NCI. The amount was an accounting presentation change in the consolidated balance sheet rather than revenue for the quarter ended 30 September 2026.

At 30 September 2026, TII reported NCI of Rs 6,794.69 crore, compared with Rs 6,450.56 crore at 31 March 2026. Equity attributable to TII owners rose to Rs 8,110.21 crore from Rs 7,751.41 crore, taking total equity to Rs 14,904.90 crore from Rs 14,201.97 crore.

TII's consolidated assets were Rs 24,045.04 crore at 30 September 2026, compared with Rs 21,486.89 crore at 31 March 2026. Total liabilities increased by Rs 1,855.22 crore over the same period, while the specific Rs 2,404.70 crore CCPS movement had already been recorded as a liability-to-NCI reclassification at the March amendment date.

How did the change affect TII's electric-vehicles segment figures?

TII's reported electric-vehicles segment liabilities were Rs 558.66 crore at 30 September 2026, compared with Rs 3,891.18 crore at 30 September 2025, while capital employed changed to Rs 1,599.22 crore from negative Rs 1,718.28 crore. The filing specifically states that the 30 September 2025 electric-vehicles liability and capital-employed figures included CCPS measured at fair value through profit or loss, or FVTPL.

Segment assets changed far less than liabilities, declining to Rs 2,157.88 crore at 30 September 2026 from Rs 2,172.90 crore a year earlier. The resulting shift in capital employed therefore reflects the different CCPS presentation as well as the reported movement in segment balances.

TII states that segment assets and liabilities exclude goodwill, deferred-tax assets, deferred-tax liabilities, derivative instruments and borrowings. The capital-employed figures are therefore a defined segment measure, rather than a complete representation of all assets and liabilities in the consolidated statement of financial position.

What were TII's operating results alongside the classification change?

TII reported consolidated revenue from operations of Rs 7,330.31 crore for the quarter ended 30 September 2026, up from Rs 5,522.64 crore in the corresponding 2025 quarter. Profit before tax was Rs 643.82 crore, compared with Rs 458.96 crore, while profit attributable to TII owners was Rs 249.07 crore against Rs 186.66 crore.

The electric-vehicles segment generated Rs 475.78 crore of revenue in the September 2026 quarter, compared with Rs 177.30 crore a year earlier. Its segment loss narrowed to Rs 146.47 crore from Rs 157.80 crore, and these operating figures are separate from the CCPS classification in the balance sheet.

For the half year ended 30 September 2026, TII generated Rs 853.01 crore of cash from operations, down from Rs 1,005.92 crore in the previous-year half year. Net cash from operating activities was Rs 435.50 crore compared with Rs 640.05 crore, while purchases of property, plant, equipment and intangible assets were Rs 878.61 crore against Rs 1,067.25 crore.

TII also disclosed a Rs 25 crore subscription to Series D CCPS of 3xper Innoventure Limited during the September 2026 quarter. That investment was in a different subsidiary from TICMPL, whereas the Rs 250 crore TICMPL Series C CCPS investment was addressed in the further amended shareholders agreement.

Conclusion

TII's Rs 2,404.70 crore reclassification changes the consolidated presentation of TICMPL outside-investor CCPS from a fair-value liability to NCI within equity. The difference is especially visible in the electric-vehicles segment, where the 30 September 2025 comparison included CCPS at FVTPL and reported liabilities of Rs 3,891.18 crore, compared with Rs 558.66 crore at 30 September 2026.

The next point to watch is the conversion mechanism in the further amended shareholders agreement, which includes TII's Rs 250 crore Series C CCPS investment. TII said all series are expected to convert into a fixed number of shares at the end of their term unless conversion events occur, and said it believes events that could require a variable number of shares are within the Group's control.